The non-fungible token market platform OpenSea has called upon the US Securities and Exchange Commission to specifically exclude NFT marketplaces from oversight under federal securities regulations.
The SEC must “unequivocally declare that NFT marketplaces like OpenSea do not constitute exchanges as per federal securities regulations,” stated OpenSea’s chief legal officer Adele Faure and deputy general counsel Laura Brookover in a letter dated April 9 addressed to Commissioner Hester Peirce, who heads the agency’s Crypto Task Force.
Faure and Brookover maintained that NFT marketplaces do not fulfill the legal criteria of an exchange under US securities laws since they do not facilitate transactions, serve as intermediaries, or connect multiple sellers for a single asset.
“The previous enforcement initiatives of the Commission have fostered ambiguity. Therefore, we advocate for the removal of this ambiguity to safeguard the capability of US tech firms to excel in this domain,” Faure and Brookover articulated.
The legal team at OpenSea has requested the SEC to provide informal guidance regarding NFT Marketplaces. Source: SEC
“While drafting this guidance, the Crypto Task Force should directly consider the relevance of exchange regulations to marketplaces dealing in non-fungible assets, akin to recent staff declarations concerning memecoins and stablecoins,” Faure and Brookover further remarked.
In a notice released on April 4, the SEC stated that stablecoins meeting certain conditions are deemed “non-securities” and are exempt from transaction reporting obligations.
Simultaneously, the SEC’s division of corporate finance mentioned in a staff statement on February 27 that memecoins are not classified as securities under federal securities laws and are more analogous to collectibles. Faure and Brookover contended that the Crypto Task Force should also exclude NFT marketplaces like OpenSea from the obligation to register as brokers, claiming they do not provide investment guidance, carry out transactions, or manage customer assets. “We urge the SEC to clarify the existing confusion in the industry concerning this matter by issuing informal guidance. In the long run, we encourage the Commission to exempt NFT marketplaces like OpenSea from intended broker regulations,” they expressed. Related: OpenSea suspends airdrop reward program following user feedback During the Trump administration, the SEC has gradually been softening its strict position on cryptocurrency established under former Chair Gary Gensler. The regulator has dismissed several enforcement actions it had previously initiated against crypto companies and has curtailed investigations into crypto entities concerning alleged securities law breaches, including one involving OpenSea. Magazine: Trump-Biden wager sparked fixation with ‘absurd’ NFTs —Batsoupyum, NFT Collector
OpenSea asserts NFT marketplaces don’t conform to broker classification
